CFPB proposal would extend supervision to digital wallet, payment app companies

The Consumer Financial Protection Bureau (CFPB) issued a proposal Tuesday to extend supervision and examinations to larger nonbank companies that offer services that include digital wallet and payment apps. The proposal would apply to nonbank financial companies handling more than 5 million transactions per year to ensure they adhere to the same rules as financial institutions already supervised by the CFPB.

“CUNA strongly believes that all financial products and services should be subjected to materially equivalent regulatory oversight, regardless of the nature of the entity providing the product or service. We support policies that level the playing field between fintechs and regulated financial institutions such as credit unions, so we’re pleased that the CFPB is addressing the need for greater nonbank supervision,” said Madison Rose, CUNA senior director of advocacy and counsel for payments and technology. “Our advocacy team—in collaboration with our advocacy subcommittees—will analyze the proposal fully in the coming days for potential credit union impacts and provide detailed feedback to the CFPB.”

Specifically, the proposed rule would help ensure these companies:

• Adhere to applicable funds transfer, privacy, and other consumer protection laws, which includes applicable protections against unfair, deceptive, and abusive acts and practices, rights of consumers transferring money, and privacy rights.
• Play by the same rules as credit unions and banks, ensuring federal consumer financial protection law is enforced consistently between non-depository and depository institutions.

Comments will be due by Jan. 8, 2024, or 30 days after publication in the Federal Register, whichever is later.